7. Which of the following relationship is correct? a. Equilibrium employment and

Question

7. Which of the following relationship is correct? a. Equilibrium employment and full employment may not be the same b. Equilibrium employment and full employment are not related c. Equilibrium employment and full employment are always the same d. Equilibrium employment and full employment are never the same 8. Which of the following was not a factor limiting the severity of effects of the oil sopply shock of 1979-80? a. Increase in use of alternative sources of energy b. More efficient use of energy c. Increased supplies of non-OPEC oil d. More rapid worldwide economic growth 9. Which one of following does not cause the aggregate demand curve to slop downward? a. Changes in relative prices between foreign and domestic goods b. Interest rate changes c. Wealth effect d. Chnages in real output 10. W a. teh aggregte supply curve moves up the aggregate demand curve and i incone b. the aggregate demand curves moves up the aggregate supply curve and increases prices and real income c. the aggregate demand curves moves down the aggregate supply curve and increases both real income d. the aggregate supply curve moves down the aggregate demand curve and reduces p increases in real income ith aggregate demand shocks? increases price and reduces real prices and rices and

Explanation / Answer

7)

Right answer is (A)

It is not always that equilibrium and full employments are same. Some times, equilibrium employment is below the full employment rate. such situation is witnessed during the recessionary phase.

8)

Right answer is (D)

Severity of effects of oil prices was not limited by rapid economic growth, instead it led to rapid rise in demand for oil. Situation may become worse in such condition.

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